AA Erred in Rejecting Section 9 Plea Where Undisputed Overdues to Creditor Were Admitted by Corporate Debtor | NCLAT

Case Details: Clicbrics Technologies (P.) Ltd. v. Ansal Housing Ltd. - [2023] 155 taxmann.com 76 (NCLAT-New Delhi)

Judiciary and Counsel Details

• • Justice Ashok Bhushan, Chairperson & Barun Mitra, Technical Member
  • Vinod Kr. Chaurasia, Adv. for the Appellant.
  • Vikas Tiwari, Kumar Deepraj, Advs. & Anchit, AR for the Respondent.

Facts of the Case

In the instant case, an MoU was entered into by the corporate debtor appointing the appellant/operational creditor as an agent for brokering the sale/purchase of units of the project of the corporate debtor.

Since, the corporate debtor stopped making payments for invoices for brokering commission raised by the appellant, it sent a demand notice to the corporate debtor. Subsequently, the appellant filed a section 9 application before the Adjudicating Authority (NCLT).

The NCLT held that the appellant had approached with a mala fide intention having refused cheque payments issued by the corporate debtor and dismissed the said application vide the impugned order.

It was noted that the corporate debtor had admitted outstanding liability before the NCLT in its written submissions and the same was also substantiated from two cheques which were drawn in favour of the appellant by the corporate debtor subsequent to demand notice.

The NCLAT observed that since the operational debt which had admittedly become due and payable had not been disputed prior to the issuance of the demand notice and had not been discharged by the corporate debtor, the instant was a fit case for the admission of the CIRP.

NCLAT Held

The NCLAT held that the NCLT had erroneously rejected an application filed under section 9 and the impugned order was to be set aside.

List of Cases Reviewed

• • Redbrics Ites India (P.) Ltd. v. Ansal Housing Ltd. [2023] 155 taxmann.com 75 (NCLT – New Delhi) (SB) (para 25) reversed. [See Annex]
  • Vidarbha Industries Power Ltd. v. Axis Bank Ltd. [2022] 140 taxmann.com 252/173 SCL 355 (SC) (para 17)
  • Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [2017] 85 taxmann.com 292/144 SCL 37 (SC)
  • S.S. Engineers v. Hindustan Petroleum Corporation Ltd. [2022] 140 taxmann.com 524/173 SCL 477 (SC) (para 24) followed,
  • K. Kishan v. Vijay Nirman Company (P.) Ltd. [2018] 97 taxmann.com 495/150 SCL 110 (SC) (para 18)
  • Praveen Kumar Mundra v. CIL Securities Ltd. [2019] 107 taxmann.com 439/154 SCL 574 (NCLAT – Delhi) (para 22) distinguished.

List of Cases Referred to

• • Vidarbha Industries Power Ltd. v. Axis Bank Ltd. [2022] 140 taxmann.com 252/173 SCL 355 (SC) (para 6)
  • Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [2017] 85 taxmann.com 292/144 SCL 37 (SC) (para 10)
  • K. Kishan v. Vijay Nirman Company (P.) Ltd. [2018] 97 taxmann.com 495/150 SCL 110 (SC) (para 15)
  • Praveen Kumar Mundra v. CIL Securities Ltd. [2019] 107 taxmann.com 439/154 SCL 574 (NCLAT – Delhi) (para 22)
  • S.S. Engineers v. Hindustan Petroleum Corporation Ltd. [2022] 140 taxmann.com 524/173 SCL 477 (SC) (para 23).